Learning how to do inventory management is vital to the success of companies of all types and sizes, as it represents a significant part of the company’s working capital.
When it comes to this issue, any failure can generate serious damage to the business. Therefore, it is essential that the entrepreneur and the team know how to manage inventory efficiently.
However, depending on the size of the organization and the resources available, this task can become a major challenge. With that in mind, we explain in this article the main steps on how to make effective inventory control on a daily basis. Want to know more? Check it out below!
What is inventory management?
Before understanding how to do inventory management, you need to understand what it is.
Inventory management the process of monitoring of purchased and stored items for the company. This control ensures that the organization is able to meet customer demands without accumulating losses, either scarcity or excess of materials.
When the company doesn’t know how to manage inventory, increase the risk of financial loss expressive.
>> To learn more about corporate finance, check out this other blog post:
Financial control in the company: what is it and how to do it? <
If the inventory has fewer items than necessary, the company is unable to fulfill orders and meet their deadlines, which leads to loss of customers and low profitability.
The reverse is also a problem: when there is many items stocked without demand to consume them, this working capital is stopped, which means a waste of money and materials.
In addition, inefficient inventory control also facilitates:
- duplicate purchases;
- attendance problems.
Therefore, adequate control is one of the best ways to reduce costs in the company and create more dynamic processes.
How to manage inventory efficiently? 5 steps
The good inventory manager is able to predict demand for the next order, always being prepared to serve customers.
The steps for everything to go as planned are:
- use management software;
- have a safety stock;
- make periodic inventories;
- make inbound and outbound updates immediately;
- integrate inventory with other departments.
Next, learn more about these valuable tips and raise your level of organization.
1. Use management software
Record books and domestic table and report programs are in the past. For optimize inventory management and making it more reliable is essential to have fast and complete software.
Implement a system capable of aggregating:
All of this in an intelligent and practical way, automating the stock control as much as possible.
All items must be cataloged electronically, with their dates of purchase and position in the warehouse registered in the program.
Having this data organized and easily accessible prevents losses and facilitates traceability of the products.
Another advantage of stock management software is the possibility to plan new purchases more accurately.
Just schedule alerts when quantities fall, using this feature to check the need to advance or postpone new purchases.
2. Have a safety stock
Never purchase materials by following sales forecasts to the letter. The ideal is always to acquire a extra amount, as external factors can surprise your business with unexpected additional demand.
Although exaggerations are harmful, this safety margin is one of the most important parts of how to manage inventory efficiently.
O extra stock size will depend on the type of production and the quality of the suppliers.
How much more agile and reliable they are, the less need to keep many items in the emergency stock.
On the other hand, if your company needs raw materials that require longer delivery times, you may need a larger purchase to ensure peace of mind.
3. Take periodic inventories
Even with the aid of inventory management software, periodic inventories are still extremely important for the organization of purchases and storage of items.
It is normal that, on a daily basis, something goes out of place or fails to be properly registered. Frequent inventories help to solve these problems immediately, keeping the stock always organized and in good working order.
A good inventory strategy is divide the inventory by zones and leave each one in charge of an employee.
The warehouse team must be well trained in the processes of cataloging and storage, in addition to being composed of trusted people. After all, it is with this team that you must count on to take care of the stock in the best possible way.
4. Make inbound and outbound updates immediately
You know the maxim “Don’t wait until later what you can do now”? It also applies to those who manage your company’s inventory.
Right after a purchase is made, the stock materials record must be updated immediately responsible person. This prevents the work from accumulating and reduces the chances of forgetfulness, which can cause serious failures in the process.
Imagine an entire purchase forgotten in the corner of the warehouse for lack of registration. The result of this is the realization of a new purchase made in an unnecessary way, generating:
- accumulation of items;
- financial loss.
In the video below you can find more tips to keep your cash flow updated, helping in the company’s inventory management. Check out!
5. Integrate the stock with the other departments
When learning how to manage inventory it is important that you do not consider it an isolated area of the company. On the contrary: its integration with other departments is essential for the success of the business.
For example: if the sales sector detect a upward trend in demand for a given product, the stock needs to be communicated immediately, so that it can respond with agility.
After all, everything is interconnected: if the salesperson promises a deadline to the customer and the stock is not able to meet, that means a big problem for both departments and for the company as a whole.
Now that you already know how to manage inventory in the company, how about putting what you have learned into practice?
Do one analysis of how the process works today in your organization and try to implement the measures we mentioned throughout the article.
This way, you will be able to reduce costs and improve the quality of processes and services exponentially!
Did you see? Managing inventory can make all the difference in a company’s profitability and financial management.
Other sectors, in addition to inventory, are also strategic and can help reduce your company’s expenses.
Have you thought about how to reduce 30% of your HR costs? Get to know HR Consultant UK’s software and also optimize this area of your company.
Did you like the post? To learn more techniques to evolve the management of your business, read also; “Business management tips: 5 strategies from HR to finance”.